Friday, November 20, 2009

Planting the Seeds of Business Successes in South Rajasthan

Project Background
ACCESS Development Services is a not-for-profit Section 25 company offering specialized technical assistance in the areas of microfinance and livelihood promotion. ACCESS’s unique intervention model improves the livelihoods of India’s poor farmers by organizing them into business groups, aggregating their small surpluses, and integrating them into the value chain.
ACCESS has been working in two districts of South Rajasthan through the National Agriculture Innovation Project (NAIP), under a program entitled Livelihood and Nutritional Security of Tribal Dominated Areas through Integrated Farming System and Technology Models.
ACCESS uses a unique, replicable livelihoods model to organize, aggregate, and integrate poor producers.
As a member of a consortium led by Maharana Pratap University of Agriculture and Technology (MPUAT) and including Krishi Vigyan Kendra (KVK), ACCESS’s role is to organize farmers into business groups along self-help principles, to facilitate savings, to aggregate surpluses, and to conduct training and capacity-building sessions. Eventually groups will be federated into a legal entity as a Producer Company.
Farmers develop business and leadership skills early-on which are later applicable in the Producer Company. The project targets groups in two tribal-dominated districts, Dungarpur and Banswara, both characterized by low income and productivity, poor soil and water management, poor adaptation of new technologies, limited inputs, and high population ratio. To date, ACCESS has reached four clusters across the two districts including approximately 5,000 households in 23 villages.


The Sagwariya Cluster
Since work in the Sagwariya Cluster of Banswara began in October 2008, ACCESS has formed 25 Farmer Business Groups totaling 265 members. Farmer Business Groups consist of 10-15 members from the same hamlet who pool savings to collectively purchase inputs through a joint bank account. Each group sends one group leader to a monthly meeting at the cluster level. They selected Jammbu Khand Kisan Sangh as the name of their cluster.














The Executive Committee of Jambu Khand Kisan
Sangh
discusses opportunities for cluster betterment.

Monthly cluster meetings follow a set agenda which includes discussing how to strengthen the FBG’s, pooling savings for collective purchase, selecting which crops to grow in the next cycle, designing marketing strategies, and other pertinent issues. At meetings farmers also contribute 10 rupees per member (totaling 2,650 rupees per month) to the corpus fund to be used for operational expenses. Meetings are inclusive and participatory by the farmers, and are facilitated by members of the ACCESS team.


Recently group representatives elected leaders to two committees at the cluster level: the Executive Committee, consisting of a President, Secretary, and Cashier; and the Monitoring Committee, consisting of a President and Vice- President.

Progress of Jhambu Khand Kisan Sangh
Since its inception, the Sangh has collectively procured agricultural inputs of 181 quintals of high quality wheat, 40 quintals gram, and 12.5 quintals maize sees. The Sangh then distributes them to 603 member and non-member farmers at a margin that is used to cover operational expenses. Farmers who are not members of FBGs pay a slightly high price for the inputs. Through these collective procurement efforts, farmers have saved 30-40% of their cost over procuring from local trader, and Sangh has raised Rs. 48,000 for their corpus fund.

Partnership with RSSCL
By purchasing collectively, 150 farmers in the Sagwariya Cluster saved 330 rupees each - 49,500 rupees total - on their most recent seed purchase.The Jammbu Khand Kisan Sangh cluster recently achieved considerable success through a partnership with Rajasthan State Seed Corporation Limited, Banswara (RSSCL), a semi-public organization with which ACCESS has linked the farmers for collective procurement of better seed varieties.













Representatives of the Farmer Business Groups
attend the regular monthly meeting in Banswara.


ACCESS establishes market linkages between producers and organizations such as Rajasthan State Seed Corporation, Ltd. RRSCL has offered support for production as well as a buy-back guarantee mechanism for production of certified seeds of wheat, gram and maize.The market price for the seed variety purchased was 21 rupees per kilogram, and the dealer price through RSSCL was 14.30 rupees per kilogram. However, due to the collective purchasing efforts, the cluster received an additional 50% subsidy under the Central Sponsorship Scheme (CSS), paying only 7.15 rupees per kilogram. The seed was sold to the individual farmers at 10 rupees per kilogram, with the difference (2.85 rupees per kilogram) put into a cluster savings account. Each of 150 contributing farmers received 30 kilograms, totaling 45 quintals. The resulting savings to the farmers over the market price was 11 rupees per kilogram - 330 rupees per individual, and 49,500 rupees for the cluster.


Looking Forward
Farmers in the Jammbu Khand Kisan Sangh cluster will continue to benefit from the work of ACCESS Development Services’ livelihoods initiative. They will maintain the business partnership with RSSCL, as well as explore future opportunities for business growth. Such opportunities include producing and processing high-value red chili and establishing forward-market linkages through agreements to sell to distributors such as ITC, Ltd. and Reliance Food Processing Solution Ltd. Coming months will also see the legal transformation of the cluster organization into a registered Producer Company.